Pakistan Tech Exports Soar 69% in February 2021

[Riaz Haq]

Pakistan's technology exports shot up by 69% in February 2021 from the same month last year. Tech exports soared 41% for the first 8 months (July 2020-February 2021) of the current fiscal year from the same period period last year, according data released by the State Bank of Pakistan. 

Pakistan Tech Exports Trend. Source: Arif Habib Securities

Technology services exports from Pakistan continued their momentum into February 2021, rocketing up 69% to $179 million, up from $106 million in February 2020. ICT exports for the first 8 months of the ongoing fiscal year 2020-2021 rose 41% to $1.3 billion, on track to reach or surpass the $2 billion mark this year. 

In addition to jump in tech services exports, Pakistan is also seeing double-digit growth in exports of engineering goods, up 19.74% for the first 8 months of the current fiscal year.  Export of electric fans posted over 15% growth and other electrical machinery 17.16%.

There is real hope for Pakistan to dramatically increase its higher value-added exports if the current trends in tech services and engineering goods can be sustained. Seizing the opportunity to attract export-oriented investors will help Pakistan become the next Asian Asian Tiger economy. It will help the country avoid recurring balance-of-payments crises that have forced the nation to seek IMF bailouts with all their tough conditions. Focusing on "Plug and Play" Special Economic Zones (SEZs) is going to be essential to achieve this objective.

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[Riaz Haq]

#Pakistan’s #exports to #US increased 11.9% to $3 billion in 8MFY21 during the (July-February). February monthly exports to US increased by 27.68% to $401.949 million from $314.8 million in February 2020 - Profit by Pakistan Today https://profit.pakistantoday.com.pk/2021/03/24/pakistans-exports-to...

Pakistan’s exports of goods and services to the United State (US) witnessed a surge of 11.86 per cent during the first eight months of the fiscal year 2020-21 (FY21) as compared to the corresponding period last year.

According to details, overall exports to the US were recorded at $3,082.2 million during the (July-February) period against exports of $2,755.2 million during the corresponding period in FY20, State Bank of Pakistan (SBP) data revealed on Thursday.

Meanwhile, on a year-to-year (YoY) basis, exports during February 2021 also increased by 27.68pc, from $314.8 million against the exports of $401.949 million.

However, on a month-on-month (MoM) basis, exports rose by 0.5pc during February 2021 in comparison with exports of $399.9 million in January 2021, SBP data said.

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Overall, the country’s exports to other countries witnessed a decline of 2.26pc in 8MFY21, from $16.438 billion to $16.065 billion.

On the other hand, imports from the US during the period under review were recorded as $1,467.5 million against $1,470.7 million last year, showing a nominal decrease of 0.24pc in 7MFY21.

The overall imports into the country increased by 8.59pc, from $29.6 billion to $32.1 billion.

Earlier, Pakistan’s exports to the United States surpassed the $400-million mark during the months of October and November 2020.

The US also remained the top export destinations of the Pakistani products during the first four months (July-Oct) of FY21, followed by United Kingdom (UK) and Germany.

Meanwhile, Pakistan’s exports to regional countries declined 22 per cent in the first eight months of the current fiscal year due to the impact of Covid-19.

Exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives fell to $1.171 billion in 8MFY21, from $1.504bn the previous year, according to the latest data compiled by the State Bank of Pakistan.

On the other hand, the country’s trade deficit with the region narrowed slightly during the period under review as imports from these countries also dipped.

Pakistan’s exports to Afghanistan fell 13.6pc to $629.324m in 8MFY21 from $728.315m in 8MFY20. A few years ago, Afghanistan was the second major export destination after the United States.

[Riaz Haq]

PKR is getting stronger against the US$ over the last few months. The rupee has recovered more than Rs12 during the last seven months since it touched an all-time low of Rs168.43 last year in August. https://arynews.tv/en/pakistani-rupee-strengthens-against-us-dollar-9/

According to the State Bank of Pakistan (SBP), the local unit closed at Rs155.39 against the greenback as compared to Monday’s closing of Rs155.85.

The local currency has gained considerable ground on the back of improved foreign exchange reserves, current account surplus, higher remittances besides less demand of dollar due to the ongoing pandemic.

The rupee has recovered more than Rs12 during the last seven months since it touched an all-time low of Rs168.43 last year in August.

[Riaz Haq]

Remittances continued their record run of above $2bn for 10th consecutive month in Mar. At $2.7bn, they were up 20% compared to Feb & 43% compared to Mar20. Cumulatively, they have risen to $21.5bn during Jul-Mar FY21, up 26% over the same period last year

https://www.sbp.org.pk/ecodata/Homeremit.pdf

[Riaz Haq]

Overseas #Pakistanis' bailing out #Pakistan #economy yet again. #Remittances in July20-Mar21 reach $21.5 billion, up 26% over the same period in prior fiscal year. At $2.7billion in March 2021, they're up 20% compared to Feb 21 & 43% compared to Mar 20.
https://www.sbp.org.pk/ecodata/Homeremit.pdf

https://twitter.com/haqsmusings/status/1381477053451497472?s=20

[Riaz Haq]

#Pakistan #exports to #US increase 29% to $4.1 billion in July20-April21.“This is a substantial increase of $918 million and credit goes to our exporters for making this possible under difficult global conditions,” said Special Asstt to PM Razzak Dawood https://www.thenews.com.pk/print/833994-pakistan-exports-to-us-incr...

Pakistan’s exports to the US increased 29 percent to $4.1 billion in the first 10 months of the current fiscal year, commerce adviser said on Tuesday.


Adviser to Prime Minister for Commerce and Investment Razak Dawood said the US continues to be an important market for Pakistan.

“Our exports to the US during Jul-Apr 2021 have increased by 29 percent to $4,092 million as compared to $3,173 million in Jul-Apr 2020,” Dawood wrote on Twitter.

“This is a substantial increase of $918 million and credit goes to our exporters for making this possible under difficult global conditions,” he said.

Europe is still the biggest export destination for Pakistan. The country exported $519 million of goods and services to Eastern Europe, $1.98 billion to Northern Europe, $1.4 billion to Southern Europe, and $2.81 billion to Western Europe in the July-March period, according to the central bank’s latest data.

“I appreciate the efforts made by ministry of commerce’s trade and investment officers and urge them to provide maximum facilitation to our exporters and investors,” said Dawood.

The United States recently assured support to Pakistan’s economy amid the unrelenting coronavirus challenges and expressed satisfaction over the government’s focus on geo-economics.

In a meeting with Finance Minister Shaukat Tarin, US Charge d’ Affaires Angela Aggeler assured him of full support of the US government and its people to the government of Pakistan during ongoing COVID-19 pandemic.

Aggeler appreciated the Prime Minister’s focus on geo-economics. “Economic growth drives everything else,” a statement then quoted her as saying. “A number of US companies are looking for business and economic opportunities in Pakistan.”

Number of US companies top the list of foreign businesses operational in Pakistan, according to the Overseas Chamber of Commerce and Industry.

After showing surge last fiscal year, foreign direct investment started to decline in Pakistan as businesses and investors were playing cautiously to ride on the waves triggered by the pandemic.

With annual foreign direct investment inflows of less than $3 billion, Pakistan lags far behind the potential of exploring the country’s enormous human capital. Foreign direct investment accounts for one percent of its GDP.

The downtrend was further accelerated by the world-changing impact of the coronavirus COVID-19.

Bilateral relations between the two countries have further strengthened due to people-to-people ties, economic and business linkages as well as common interests in promoting peace and stability in the region

With 220 million consumer market, growing middle class and a young population, Pakistan offers immense opportunities for the US enterprises to invest in sectors such as information technology, agriculture, energy and tourism. Strong bilateral relations would, in turn, facilitate closer economic cooperation between the two countries.

Pakistan economy will return to growth in fiscal year 2020-21, gaining a modest 1.5 percent and accelerate to 4.4 per cent in 2022, according to ratings agency Moody’s. The government and central bank responses and reforms will partially soften the pandemic's impact and help revive the economy. The government and the central bank project growth at 3 percent.

[Riaz Haq]

#Pakistan reports 10-year high #exports in fiscal year 2021 despite #covid19 #pandemic. #Tech exports reached record $2 billion. #Textile exports increased 18.85% while #pharma exports increased 27%. Exports of #copper and copper derivatives increased 44%.

https://www.samaa.tv/money/2021/07/pakistan-reports-ten-year-high-e...

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Pakistan's exports increase to $31.3 bln in FY21: Razak Dawood


https://dunyanews.tv/en/Business/608729-Pakistan-exports-increase-to-$31.3-bln-in-FY21-Razak-Dawood

Adviser to Prime Minister on Commerce and Investment, Abdul Razak Dawood said Thursday that the country’s exports increased to 31.3 billion during the last fiscal year (2020-21), reflecting government’s successful trade policy.

As Compared to the previous financial year (FY2020), exports increased by 18 percent during 2020-21, despite the negative impact of Covid-19, the adviser said this while addressing a press conference here.

He said that during the outgoing financial year, country’s merchandize exports stood at $25.3 billion, while services exports reached to $ 6 billion. He said that during the last month of June 2020-21, domestic exports exceeded $2 billion.

Similarly, Information Technology (IT) exports remained above $2 billion in last Fiscal Year, he added.

He said that the government would sign a Preferential Trade Agreement (PTA) with Uzbekistan on July 7.

He said the government was working on ‘Tariff Rationalization’ and would rationalize 4,000 tariff lines in the next financial year 2022.

[Riaz Haq]

‘Trade Diversification Policy’ boost country’s exports in non- traditional markets: Razak Dawoo

https://www.app.com.pk/business/trade-diversification-policy-boost-...


The Ministry of Commerce has launched the ‘Look Africa campaign’ in search of new unconventional markets and did a lot of work on Central Asian markets, which has resulted in good exports. He said that in addition, new industrial units are being set up to promote product diversification to boost domestic exports in information technology, light engineering including tractors, fisheries and electronics and mobiles.

So far, Country’s exports of non-traditional products, including information technology, have grown by 60 percent in the last four months. Razak Dawood said that the increase in the existing exports was a manifestation of good policy of the present government during Covid -19. He said that like Association of South East Asian Nations (ASEAN), “We also need to strengthen the our regional bloc in South Asian Association fo.r Regional Cooperation (SAARC) and increase bilateral trade activities in the regional countries.”

He said that the government has reduced tariffs and duties on raw materials to zero per cent to increase the country’s exports. These include Textile, Fiber and Jute where tariffs are discounted.

Replying to a question, he said that Pakistan exports to Central Asian Republics (CARs) countries increased to USD $ 145 million in 2020-21 from USD $ 104 million in 2019-20. For six months, from July-December 2021, these exports increased by 173 percent to USD$ 134 million from USD 49 million during the same period last year, he said. The Ministry of Commerce’s ‘Silk Route Reconnect’ initiative is now bearing results, he added.

To increase the trilateral trade Volume with CARs, the Adviser said that the Pakistan-Uzbekistan Transit Trade Agreement was signed in 2021 at Tashkent and both the countries discussed opening banks in each other’s country. “We are negotiating Preferential Trade Agreements (PTAs) with Afghanistan, Azerbaijan and Uzbekistan”, adding, transit trade agreements were also being negotiated.

The advisor said that for truck movement, their negotiations were at an advanced stage. Replying to another question on Information Technology exports, he said that there is a lot of scope to increase exports in Information Technology (IT) from non-traditional sectors at present.

The current annual $ 2.5 billion IT exports are very low, “We now have an annual export target of $ 4 billion this year, he said.

Razak Dawood said that there was a need to promote export culture in the country at present and the government wanted to increase exports on priority basis.

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He added that Micro Small and Medium Enterprises (MSMEs), that use e-Commerce platforms, are around five times more likely to export than those in the traditional economy and the policy aims to pave the way for holistic growth of e-Commerce in the country by creating an enabling environment in which enterprises have equal opportunity to grow steadily. He stressed that the way forward for Pakistan on the economic front is to focus on exports, specifically IT related exports.

While informing about the current export situation, he said that because of prudent economic and trade policy of the government, Pakistan export target of USD $15.125 was achieved in the first half of FY 2021-22 from July-December.

From July-December 2021, Pakistan exports were USD$ 15.125 billion and the target for the first half of the current FY, were USD$ 15 billion, said. Razak Dawood said that Pakistan’s exports during December 2021 increased by 16.7 percent to USD$ 2.761 billion as compared to USD$ 2.366 billion in December 2020, showing an increase of almost USD $400 million.

[Riaz Haq]

While jumping 29 percent to $251 million in December, IT exports surged 36 percent to $1.3 billion in the first half of this fiscal year, mostly riding a massive stream of investment pouring into Pakistan’s technology sector, data showed on Saturday.


https://www.thenews.com.pk/print/927335-it-exports-surge-36pc-in-fi...


Technology exports amounted to $667 million in the second quarter. Pakistan’s total IT exports stood at $1.44 billion in FY2020, which increased to $2.1 billion in FY2021.

According to Khurram Schehzad, CEO of Alpha Beta Core, this growth will gather more momentum down the line.

“Increased investment in the startup ecosystem is helping Pakistan develop technology infrastructure, which will in turn increase IT exports growth,” Schehzad said.

However, the recent increase in foreign investments in Pakistan, especially in tech based startups doesn’t reflect in the IT exports.

But Schehzad says it has been helping develop technology infrastructure and increase job opportunities in tech-based companies, which will eventually help increase IT exports further.

“I see IT exports recording a historic high of $2.8 billion to $3 billion in the fiscal year 2022,” an IT sector analyst said.

“But it depends on if the government is willing to incentivise the sector.”

He said the government also needed to establish tech zones to help the sector grow more.

He said around 15,000 IT companies were being established and hiring fresh employees, adding, expansion of the technology sector would subsequently fuel IT exports growth.

Wajid Rizvi, Head of Strategy and Economy at JS Global, expects IT exports to grow to $2.6 billion by the end of FY2022.

“The market-based exchange rate and devaluation of rupee has also enhanced the potential of technology sector exports as the companies/individuals associated with the sector receive their payments mostly in dollars,” Rizvi said.

He added that Pakistan was a net exporter of IT services and the sector had a great potential to grow, evident from a rising trend of software and other IT exports.

[Riaz Haq]

Pakistan’s tech exports witness sharp 27% drop in May 2022

https://www.techjuice.pk/pakistans-tech-exports-witness-sharp-27-dr...

Pakistan’s tech exports have taken a plunge for the first time since February 2021, as new data reveals that the country’s exports in the tech sector dropped by 27 percent in May 2022 as compared to April 2022.

As per State Bank of Pakistan (SBP) data, IT exports in May amounted to $183 million while in April they were considerably higher at $249 million. Exports have fallen 8 percent year-on-year.

In May 2021, Pakistan exported $198 million worth of technology-related products and services. The technology sector witnessed exports worth $2.4 billion in 11 months of this fiscal year, contributing 38 percent to overall services’ export and marking a 25 percent year-on-year increase.

While IT export performance has certainly been encouraging, and has helped improve the country’s foreign exchange earnings, the monthly drop in exports in May is still far from an ideal scenario.

The reason being touted for the drop in IT exports is the extended Eid holidays. Since the pandemic resulted in a rise in freelancing, the export performance of country’s technology products and services stayed higher.

However, despite the Prime Minister of Pakistan’s ambitious declarations to target $15 billion in IT and IT-enabled services exports, the released budget brings down the industry’s potential to meet this aim. This was noted in a recent P@SHA press release.

According to Chairman P@SHA Badar Khushnood, the current taxation regime in place is “regressive” and has already proven disastrous for the IT industry’s growth.

“This year’s targeted exports of USD 3.5 billion are also not being achieved due to the introduction of an inefficient tax regime,” he stated. “Rather than facilitating the IT industry with more and better incentives to catalyze the existing organic growth, the previously announced one and the only benefit, i.e., ‘tax exemption’ committed till 2025 has been abruptly reneged and revoked. If nothing else, this is a recipe for disaster for a nascent yet fastest growing exports-led sector!”

[Riaz Haq]

IT sector records sluggish growth at 5%
Analysts say growth hindered due to government indifference, inconsistent policies

https://tribune.com.pk/story/2392042/it-sector-records-sluggish-gro...

Despite being entirely free from the cumbersome process of acquiring Letters of Credit (LCs) and not being dependent on imports for its raw material, the export volume of the information technology (IT) sector only grew a meagre 5% in November year-on-year (YoY). Analysts are laying the blame for this low number on the government’s indifference towards unconventional export sectors.

Speaking to the Express Tribune on the condition of anonymity, an official from the Ministry of Information Technology and Telecommunication said, “Globally, IT companies’ exports grow in hundreds and thousands of times, a potential that Pakistan has in abundance but cannot tap into due to inconsistent policies. The cooperation of the finance ministry, Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) is crucial in this regard.”

“Any suggestion given to them by our ministry, however, is ignored,” said the official, lamenting that, “People in the government do not understand the export potential held by the IT sector.”

According to a Topline Research report by IT Analyst Nasheed Malik, “Pakistan’s IT exports for November 2022 increased by 5% YoY to $233 million due to a 29% jump YoY in telecom services. The exports also increased by 5% month-on-month (MoM) due to a 15% MoM increase in telecom services and 3% MoM in computer services.”

“The latest export number is also above the six-month rolling average of $221 million. Exports, however, are down by 10% from a peak of $260 million recorded in March 2022 but managed to cross the $230 million mark set in June 2022,” said Malik.

However, on a broader level, a slowdown is being witnessed with YoY growth averaging 6% in the last six months (June to November 2022), compared to the average growth of 17% YoY in December to May 2022.

“The IT Ministry has set an export target of $3 billion for FY2023,” said Malik, adding that, “With a current fiscal year monthly average rate of $217 million and a six-month rolling average of $221 million, there are concerns about whether Pakistan will be able to achieve the set target.”

In the five months of FY2023, IT exports are up by 3% YoY to $1.09 billion – the slight growth was witnessed due to a 5% YoY growth in computer services to $864 million.

According to a report conducted by Arif Habib Limited, the SBP’s reserves currently stand at around $6.7 billion, the lowest since January 18, 2019. Including the banks’ reserves of $5.9 billion, the total foreign reserves in the country stand at $12.6 billion – amounting to an import cover of less than one month – 0.99 months to be exact.

ICT Expert Parvez Iftikhar said, “So far, no government has been able to comprehend that the IT sector can help the country earn dollars without incurring any huge expenditures on raw material imports. This just indicates the lack of understanding in the government’s finance management team that decides on taxes and concessions.”

“If we equip our youth, however, with in-demand skill sets, facilitate them with in/out dollar payments, and high-quality internet connectivity, they’re quite capable of doubling the country’s exports within two years,” claimed Iftikhar, adding that the solution “isn’t even out-of-the-box!”

Si Global CEO Noman Ahmed Said told the Express Tribune that, “It is no secret that Pakistan is currently facing one of its worst economic crises yet and whilst the tech sector has consistently outperformed, it is no longer feasible for it to continue doing so at a snail’s pace.”

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“Growth has slowed, but the trend still remains positive,” said Khurram Schehzad, CEO of ABCore.